Friday, December 2, 2011

"Arthur Andersen Ex-CEO: Enron, Europe Are Similar" (ENE)

We have a ridiculous number of posts on the Crooked E, might as well pile on.
First up CNBC:

A number of similarities exist between the collapse of Enron in 2001 and
the current sovereign debt crisis in the euro zone, Joe Berardino, CEO
at Alvarez and Marshall and the former CEO of Enron's accounting firm,
Arthur Andersen, told CNBC.

"If you look at the Enron story at its most
simplistic, you had a really successful company that was a bricks and
mortar company, that became a trading company, that was very successful
as a trading company… levered up," he said, using the term popular in
business parlance for borrowing. "And then we found that leverage is
really good, until it's bad," Berardino said.

Asked
whether lessons had been learned since Enron filed for bankruptcy,
Berardino said, "we're still learning" and pointed to the sovereign debt
crisis currently engulfing the euro zone.

"(Enron)
ran out of time in terms of its liquidity and a lot of the same
elements — leverage, the need for liquidity, crisis when you lose
confidence — are repeated in all those examples. And I would argue we're
now living through it with the sovereign crisis in Europe," he said.
"There are a lot of the same elements."...MORE